Checkmate: Winning 'Strategic Chess' In The New Machine Age

Strategy

With change occurring in every other part of our business and personal lives, it is appropriate at the start of another year to explore how technology will influence the creation, deployment and monitoring of strategy. Implicit in this is the role humans will play in a future world where artificial intelligence (AI) abounds.

In his classic text, The Age of Spiritual Machines, Ray Kurzweil forecast that by 2019 a $1,000 computing device will have the computational ability of the human brain – 10,000 trillion calculations per second.

Others, such as Peter Diamandis, co-founder and executive chairman of Singularity University in Silicon Valley, predict it will more likely be around 2025 before that level of computing power is available.

The actual year is almost irrelevant. It is within a decade and the power is already available to better inform, predict and dynamically adjust our strategy in real time.

At a basic level, and for some years now, we have been able to ask our mobile phones for answers to simple questions and directions. My latest Google Pixel phone has all but eliminated the need for me to type in an internet search to answer myriad questions about the world or to help me to solve technology challenges.

The fascinating part about this is that it is the technology that is helping me to solve a tech challenge, not a person. The Pixel is the first handheld consumer device to run the new Google Assistant which, with its ability to remember and conduct an ongoing conversation, is far more than a rudimentary voice-recognition system.

A year ago, Google’s AlphaGo computer trained itself in the 3,000-year-old Chinese board game of Go. After millions of games against itself it was ready to compete; and compete it did, winning 5-nil against a professional Go player. Such an achievement was previously thought to be 10 or more years away.

To give you an idea of the complexity of Go, the number of possible positions on the board are represented by a 1 followed by 171 zeros. Such complexity is too great to address through sheer computing power. So Google adopted an approach more along the lines of how a person plays the game, through intuition and feel. AlphaGo “imagined” its way forward in the game.

More data not always the answer

In strategy, we deal with complexity by gathering as much data as possible, analysing it to identify opportunities and creating strategies to exploit advantages. We “imagine” a future in which our organisations can effectively compete, just as AlphaGo did in beating the professional player.

The challenge now is to think creatively about how this massive computing power and machine learning can assist the strategist. A simplistic, and short-sighted, approach would be to continue relegating basic number-crunching computational tasks to machines and leave the creative thinking of strategy to people.

But, as shown by AlphaGo, there is already a blurring of lines between what machines and humans can do. The next step in strategy may well be to determine how we best work with computers in an integrated way. This will require a recognition of the respective capabilities and limitations of each and an openness of mind (our minds, that is) as to what is possible.

What humans do well is conceptualising and thinking beyond the immediate problem to identify new solutions. Computers are not so good at that but excel where a problem or task is well defined. So for the moment, some might say fortunately, people will have to design the ways in which humans and machines work together, at least in the short term.

Boston Consulting Group has created what it calls an “integrated strategy machine”1 to enable strategy to be developed in an environment of continual update and improvement based on feedback, analysis and execution. The strategy machine allows this to happen in real time, not after the fact, by allowing humans and machines to play to their respective strengths.

As seen through the lens of 2016 this might look something like that below.

It is important to note that the strategy machine above represents a view of the current capabilities of machines. This will continue to evolve at a rapid pace, given the exponential rate of computing development that is occurring.

Boston Consulting Group suggests business leaders must address new questions about the interaction of people and technology if they are to take advantage of the new opportunities offered by such an approach.

These questions include defining the strategic problems to be addressed; what technology, people and design are required; how people and machines can best complement each other; how the strategy machine can evolve; and how the broader organisation can embrace the strategy machine.

In the 2,500 years since Sun Tzu first penned The Art of War, this has to be one of the most exciting times to be thinking about how we conceive, deploy and redesign strategy.

We will continue to watch and comment on developments in this area through 2017.

For now, I’ll leave the final words to Peter Diamandis: “Bottom line: We live in the most exciting time ever.”

John Barrington is a leading strategy and governance expert, and founder of Barrington Consulting Group. For more information, email john.barrington@barrington.com.au